Higher Aussie dollar rubbing salt in the wound - RBA running scared; If capital sucked from unproductive housing wasn't enough, the increased cost of our business puts another nail in the coffin
Tweet Topic Started: 7 Jun 2014, 07:35 AM (3,551 Views)
House prices coming down, a surprise? Hardly, the vacuum of capital that was sucked into the wasteful and unproductive Australian Real Estate Ponzi Scheme, is being helped along by a rising dollar and mining slow down.
Let's check the ingredient list for our epic housing bubble:
1: Rising Aussie dollar making it EVEN more expensive to do business and reducing global competitiveness. 2: Record low emergency rates, locked in between a rock and hard place. 3: Record low numbers of FHB vs high numbers of idiotic housing infestors. 4: Reducing clearance rates at auction, house price falls and terrible rental returns. 5: Exploration capital in Mining drops in half - no ones looking for more because we won't be selling more! 6: Big drops in price of Iron Ore, increased competition from overseas mines. 7: Precarious state of China's economy - housing bubble plus massive unregulated shadow banking system. 8: Rising unemployment with big job losses looming from manufacturing die off - big players running for exits.
And maybe, just maybe, Australians are understanding that property in this country hasn't got pixie dust sprinkled over it, it's subject to the same market cycles of crashes and booms like every market in every country ever existed!
The gourmet feast of over cooked housing prices will undoubtably gather more ingredients as it rolls out of the oven and onto the kitchen floor.
After a bubble has burst, no one denies that it existed. But before it does, the popular refrain is that though bubbles existed elsewhere in the world, “there’s no bubble here”. So housing bubbles are admitted to have existed in Japan, the USA, Spain and Ireland – because they’ve already burst.
Economist: U.S. Banks Preparing to Charge Customers For Deposits
Negative interest rates coming to USA
In the week that the European Central Bank cut its deposit rate for banks from zero to -0.1%, economist Martin Armstrong warns that negative interest rates are coming to the United States, meaning that Americans will be forced to pay just to keep their money in the bank.
In a move described as unprecedented, the ECB became the first central bank in history to cut any main interest rate to negative yesterday, part of a package of measures designed to encourage banks to provide more loans to businesses and households. Many view the policy as a desperate sign of Europe’s faltering economic recovery.
Critics claim that the action will do little to spur growth while threatening to cause inflation and unemployment. While banks in the EU have not indicated whether or not the costs will be passed on to consumers, the New York Times’ Neil Irwin asserts that this is inevitable.
“Banks will most likely pass these negative interest rates on to consumers, or at least try to. They may try to do so not by explicitly charging a negative interest rate, but by paying no interest and charging a fee for account maintenance,” he writes.
What about Americans? Will they also soon be charged by the bank simply for depositing their own money? Yes, according to economist Martin Armstrong.
Armstrong, who is noted for calling the 1987 economic crash to the very day, warns that U.S. banks are preparing a raft of new account fees that will serve as a de facto negative interest rate.
“In the USA, we are more-likely-than-not going to get the negative rates directly passed to consumers by the banks who will claim it is the Fed who will do so at the requests of the banks. Larry Summers has set the stage. This is just how it works. He flew the balloon to get everyone ready. This is likely to be bullish for the stock market,” writes Armstrong, noting that, “The talk behind the curtain is to impose negative interest rates on the consumer.”
House prices coming down, a surprise? Hardly, the vacuum of capital that was sucked into the wasteful and unproductive Australian Real Estate Ponzi Scheme, is being helped along by a rising dollar and mining slow down.
Let's check the ingredient list for our epic housing bubble:
1: Rising Aussie dollar making it EVEN more expensive to do business and reducing global competitiveness. 2: Record low emergency rates, locked in between a rock and hard place. 3: Record low numbers of FHB vs high numbers of idiotic housing infestors. 4: Reducing clearance rates at auction, house price falls and terrible rental returns. 5: Exploration capital in Mining drops in half - no ones looking for more because we won't be selling more! 6: Big drops in price of Iron Ore, increased competition from overseas mines. 7: Precarious state of China's economy - housing bubble plus massive unregulated shadow banking system. 8: Rising unemployment with big job losses looming from manufacturing die off - big players running for exits.
And maybe, just maybe, Australians are understanding that property in this country hasn't got pixie dust sprinkled over it, it's subject to the same market cycles of crashes and booms like every market in every country ever existed!
The gourmet feast of over cooked housing prices will undoubtably gather more ingredients as it rolls out of the oven and onto the kitchen floor.
It's almost enough to tempt a bloke to buy some gold ...
It's only negative on banks funds held by Central banks, it's not negative for depositors, although they get damn all in interest paid on their savings.
It's starting to make the ongoing returns on residential property of 4.5% to 6% look incredibly good especially if capital gains continue to be made.
Any expressed market opinion is my own and is not to be taken as financial advice
It's only negative on banks funds held by Central banks, it's not negative for depositors, although they get damn all in interest paid on their savings.
It's starting to make the ongoing returns on residential property of 4.5% to 6% look incredibly good especially if capital gains continue to be made.
What ongoing returns? They've been flat for years.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
It's only negative on banks funds held by Central banks, it's not negative for depositors, although they get damn all in interest paid on their savings.
It's starting to make the ongoing returns on residential property of 4.5% to 6% look incredibly good especially if capital gains continue to be made.
House prices coming down, a surprise? Hardly, the vacuum of capital that was sucked into the wasteful and unproductive Australian Real Estate Ponzi Scheme, is being helped along by a rising dollar and mining slow down.
Let's check the ingredient list for our epic housing bubble:
1: Rising Aussie dollar making it EVEN more expensive to do business and reducing global competitiveness. 2: Record low emergency rates, locked in between a rock and hard place. 3: Record low numbers of FHB vs high numbers of idiotic housing infestors. 4: Reducing clearance rates at auction, house price falls and terrible rental returns. 5: Exploration capital in Mining drops in half - no ones looking for more because we won't be selling more! 6: Big drops in price of Iron Ore, increased competition from overseas mines. 7: Precarious state of China's economy - housing bubble plus massive unregulated shadow banking system. 8: Rising unemployment with big job losses looming from manufacturing die off - big players running for exits.
And maybe, just maybe, Australians are understanding that property in this country hasn't got pixie dust sprinkled over it, it's subject to the same market cycles of crashes and booms like every market in every country ever existed!
The gourmet feast of over cooked housing prices will undoubtably gather more ingredients as it rolls out of the oven and onto the kitchen floor.
The guys that have ridden the wealth wave over the last 10 years have no need to sell. The guys who can't afford it are locked out of the market, and the status quo remains.
Inject a handful of smart chinese who know something is coming ( according to you ) , they are busy pumping there money out of China and into other countries such as ours, because it hasn't crashed.
Giving it even more strength.
point 1 - agree, will have more foreign bank investment as a result.
point 2 - our rates are amongst the highest on earth.
point 3 - Record low numbers of FHB, means they are pilling up, and when the time is right, when they have finished saving there 20% deposit in a year or two, there is about to be a record high number of FHB purchases
point 4 - Clearance rates are rubbish, include houses that get sold afterwards under the reserve and all kinds of ficticious numbers, and not just the sold to the man in the jumper figures
point 5 - ...... Of course not, with global growth and urbanisaiton, why would anyone ever sell more of anything
point 6 - drop in iron ore , increase in production, decrease in operating costs now exploration is minimised = much higher profits
point 7 - Everyone out side china is saying this, except china..... so really there is nothing to see here....
point 8 - give the Libs a bit longer at the helm, and see what they can do about this.
The guys that have ridden the wealth wave over the last 10 years have no need to sell. The guys who can't afford it are locked out of the market, and the status quo remains.
Inject a handful of smart chinese who know something is coming ( according to you ) , they are busy pumping there money out of China and into other countries such as ours, because it hasn't crashed.
Giving it even more strength.
point 1 - agree, will have more foreign bank investment as a result.
point 2 - our rates are amongst the highest on earth.
point 3 - Record low numbers of FHB, means they are pilling up, and when the time is right, when they have finished saving there 20% deposit in a year or two, there is about to be a record high number of FHB purchases
point 4 - Clearance rates are rubbish, include houses that get sold afterwards under the reserve and all kinds of ficticious numbers, and not just the sold to the man in the jumper figures
point 5 - ...... Of course not, with global growth and urbanisaiton, why would anyone ever sell more of anything
point 6 - drop in iron ore , increase in production, decrease in operating costs now exploration is minimised = much higher profits
point 7 - Everyone out side china is saying this, except china..... so really there is nothing to see here....
point 8 - give the Libs a bit longer at the helm, and see what they can do about this.
You cannot put a positive spin on Point 6. This is bad news and will get worse.
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